Scrap Metal Prices "Peaking"

For those doing some cleaning, the old, nonworking metallic items in the discard pile might be worth something.

Local salvage yards are reporting the price of scrap metal is up nearly 50 percent in the past few months.

“In the last two months, we’ve seen the price jump from $6 to $9 per 100 pounds,” said Angela Brown, who with her husband Kevin owns Brown’s Aluminum and Catalytic Converters in Somerville, Ala. The company buys and sells scrap metal.

Brown partially credits President Donald Trump’s imposed tariffs on aluminum and steel for the price increase. Pent-up demand is another reason she gave.

“When the price is up, the customer makes more money and we make more money selling it,” she said. “The weather is getting better, and people have been sitting on their scrap metal until the price goes up. We’ve definitely seen an increase in business recently. We’ve probably doubled our business lately.”

She said about seven years ago, 100 pounds of scrap metal sold for about $13.50. “Last year, it went as low as $3.50 per 100,” she said.

Higher Prices Equals More Customers

William and Kendra Young have owned Lawrence County Recycling for about 10 years. Kendra said she too is seeing a spike in customer traffic.

“We’re probably buying from about 60 people a day coming through here,” she said. “People know the price is up, and the word is spreading. Just this morning (Wednesday), we had four people waiting for us to open.”

Lawrence County Recycling is also paying $9 per 100 pounds, she said. Young doesn’t want the price to spike too much higher. “If it goes way up and comes back to $9, the same new customers we are seeing will not be happy,” she said.

Young said prices began to increase when Trump, who is pro-business, got elected.

Trump Tariff Impact

Tom Knippel, vice president of California-based S.A. Recycling, which has a salvage business in Decatur, Ala. said Trump’s use of authority under Section 232 of U.S. law to impose tariffs is causing scrap metal prices to jump in the short term, but can have a damaging effect in the long term.

Section 232 gives the president the ability to issue tariffs based on national security concerns. When the 25 percent tariff on steel and 10 percent on aluminum imports took effect March 23, the White House said the role those industries have in national defense justifies the usage of Section 232.

“Prices are peaking right now,” Knippel said. “The economies in the United States and around the world are strong. Trump’s 232 has increased the cost of imports. Markets are starting to adjust their pricing, and we expect to see lower prices into May.”

Knippel said the U.S. has a surplus in scrap metal, and Turkey, a major buyer of American scrap metal, had a 25 percent tariff placed on it because of Section 232.

“Trump’s action has been good for the steel mills, not necessarily for the scrap metal industry,” Knippel said. “It’s very helpful in the short term, but we’ll see some retraction as we move forward because of the tariffs and inflation.”

One of the steel producers expected to be helped by Section 232 is Nucor Steel, which has a mill in Decatur with 709 employees, according to the Morgan County Economic Development Association.

But with the increase in the scrap metal pricing, safety issues are arising, one official said.

Potential Safety Issues

Willie Allen, Lawrence County solid waste director, said he is seeing a large increase in the number of people going into dumpsters in search of metal.

“It’s not just one or two people. We are seeing a network of several, several dumpster divers,” he said. “We encourage people never to climb into a dumpster for any reason. Somebody else might come up and dump hazardous items on top of them, not knowing they are in there.”

Young said the March 19 tornadoes in Lawrence County bumped business up, too.

“Anytime you have home reconstruction work being done around here, we see some of the scrap come through here,” she said. “We’ve been seeing tin roofs from barns and metal roofs from houses brought in here in pieces. We’re seeing a little bit of everything, washers, dryers, refrigerators.”

Allen said storm debris attracts more dumpster scavengers, but the price increase is making the “dumpster diver” problem a year-round issue.

“Scrap metal always has value,” he said.

Ray Dotson, 63, of Decatur, is one seller smiling with the increased prices.

“The price is up nearly $5 in the past year,” he said. Dotson said he has been buying and selling scrap cars for about 30 years.

“I can remember it being about $14 (per 100 pounds),” he said. “I don’t know if it will get back there again, but I’m getting about $9 or so now. I’m happy with that.”

Brown and Young cautioned folks who bring stolen items to sell. They require a valid driver's license and a signed form stating the seller has the authority to sell the metal.

“We work closely with the Morgan County Sheriff’s Office,” Brown said. “They are by here regularly checking on items.”

Morgan County Sheriff Ana Franklin said her investigators haven't noticed an increase in salvage thefts. "Yet," she added.

Young had a more stern warning.

“If you bring something stolen, you will get arrested and you’ll be banned from ever selling here again,” she said.

This article originally appeared in the Decatur Daily (DecaturDaily.com). It was reprinted with permission.

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